Forbes.com – Social Media Is Fashion’s Newest Muse

Last month Marc Jacobs CEO Robert Duffy was so impressed with the amount of Twitter feedback from customers who wanted plus sizes that he tweeted, “We gotta do larger sizes,” to the company’s more than 26,000 followers. “I’m with you. As soon as I get back to NY I’m on it,” he wrote.

It was great news to Marc Jacobs’ fans who wear larger sizes. It also was evidence that, in this era of the social Web, fashion designers and retailers are no longer operating in an ivory tower or for solely the red carpet. Because of the close relationships they now have with customers on social networking sites, many have adopted an “ask and ye shall receive” policy.

Want your favorite designer to make ruby red handbags, re-issue a dress from last season or roll out plus sizes? You may only need to tweet or post a Facebook comment to get a response. While this strategy is hardly new for big corporations such as PepsiCo and JetBlue, many fashion companies are taking social media to new levels. Those that have are seeing the upside in terms of revenue and customer appreciation.

Ann Taylor, which has struggled to boost sales in recent years, saw a 16% rise in same-store sales for the second quarter of 2010–and many analysts are pointing to the company’s aggressive use of social media for helping to lure new customers. Earlier this summer LOFT, which is owned by Ann Taylor, posted photos on its Facebook page of a new pair of pants worn by a skinny model. Many commenters complained, one writing: “Sure, they look great, if you’re 5’10” and a stick like the model in the photo.”

The retailer responded the next day. “You asked and we listened,” it wrote, posting several new photos of employees wearing the same pants in sizes ranging from 2 to 12. The response garnered almost 100 comments, most applauding LOFT’s effort. One woman wrote, “This is fab idea. Kudos to you for listening to your shoppers.” The campaign has since been copied by retailers such as Banana Republic.

Ann Taylor CEO Kay Krill says, “Online and social media are playing an increasing role and complementing our direct mail outreach, advertising and PR efforts. We’ve a learned a lot by dialoguing with our customer this way.”

The company has also benefited financially, she says. In the second quarter, ending June 30, LOFT posted a 55% increase in its e-commerce sales, while the Ann Taylor brand had a 29% jump in online sales.

Besides using real women on Facebook to model its latest styles, the company has expanded its petite offerings and its shoe collection, both based on customer feedback, most of which is now coming from social media channels.

It isn’t just major retail chains that are listening to the views of their customers online. Israel-based Daria Shualy, a former fashion editor, launched the website Sense of Fashion this year with the intention of helping indie designers sell their wares and better communicate with customers. Designers sell their merchandise directly from the site and are also able to poll potential customers about favorite colors and styles.

“The whole idea is to create a closeness between customers and designers,” says Shualy. “There is something about fashion that comes across as inaccessible. That’s all changing. Today consumers are expecting direct access and a say.”

This helps boost the bottom line. “We’ve seen an exact correlation on the back end for designers,” she says. “The more they are interacting with their customers, the more they are selling.”

One Sense of Fashion merchant, Francesca Audelo, who started a line of vintage- inspired hair accessories called FancyThat in Los Angeles, regularly polls her customers on everything from feather colors to favorite styles. “The comments from my customers have shaped the way I design my headbands, and even the way I’ve set prices,” she says. “I have lowered and raised my prices based on customer feedback.”

Audelo, who attests to spending most of her day online using various forms of social media, is among a new breed of entrepreneurs who have become online friends with her customers. “I keep in touch with customers,” she says. “I know who they are and what they like.”

New York-based handbag designer Dareen Hakim, who sells to Henri Bendel and specialty retailer Intermix, has developed a similarly close relationship with her customers. Some offer color suggestions, while others have requested a clutch in a certain material via e-mail or on her Facebook fan page. “Trends are moving so quickly and fashion companies have to be nimble and react quickly to their customers,” she says.

By the end of the year Hakim, whose handbags are already customizable, hopes to offer customers the opportunity to make color and leather suggestions right on her website; she says she will then produce the suggested designs if there is enough interest.

But Hakim and other fashion designers also must learn to balance responding to digital customer feedback while maintaining a consistent brand identity. “It’s an enormous challenge,” Hakim says. “A brand today has to be both a reflection of a designer while remaining open to the suggestions of customers.”

Shauna Mei, who is launching online specialty retailer AHALife this month, aims for her site to be a two-way conversation. “I want to create a dialogue between my site, brands and shoppers, but it isn’t a democracy,” she says. “We need to filter our customers’ suggestions.”

Similar to Daily Candy‘s newsletter, one new product will be introduced on AHALife daily, handpicked by curators like Diane von Furstenberg and Tim Gunn. Shopper will also be able to suggest items for the site. Stumble across a hand-blown glass candy dish in Italy or a basket maker in rural Ohio? Make the suggestion and it might just be sold on the site. “We are relying on our customers,” Mei says, “and we will be listening.”

Athletic wear retailer Lululemon has been successful striking this balance by attaching its unique brand of customer service to its brand identity. Communication and dialogue via social media have become central to the Vancouver-based company, whose second quarter operating profits more than tripled since the same period last year. “We learn on Facebook and through social media what are our guests are really screaming for, and we actually use the feedback,” says Lululemon CEO Christine Day.

Lululemon offers a form on its website and in its stores for customer suggestions. Comments on the Lululemon Facebook page and via Twitter almost always get a response. With more than 183,000 Facebook fans and nearly 40,000 Twitter followers, that is no small task.

The company has adjusted everything from where pockets sit on pants to the placement of waistbands on running shorts, and even learned that it needed to stock more small sizes, based on online customer feedback. It doesn’t go unnoticed. Customers regularly tweet about the great service, then get a thank you in response from the Lululemon social media team.